TAXATION LAW

Wairarapa Times-Age, 30 August 1940, Page 5

TAXATION LAW

SOME CHANGES IN FINANCE BILL ADJUSTMENT OF COMPANY OBLIGATIONS. PROVISIONS RELATING TO SUPERANNUATION. (By Telegraph—Press Association.) WELLINGTON. This Day. Alterations to the income tax law affecting companies are contained in the Finance Bill No 2, which was introduced in the House of Representatives yesterday. The Bill also makes provision for the establishment by the Government of the linen flax industry, stipulates the payment of social security charge and national security tax on the issue of national savings bonds, and makes minor alterations to the law affecting Government superannuation funds.

The Bill gives legislative authority for the development of the linen flax industry, and the Minister of Industries and Commerce is empowered to make general arrangements foi’ the manufacture and disposal of the fibre. Anything done in this direction in anticipation of the passing of the Bill is validated.

Purchasers of national savings bonds are to pay in advance national security tax and social security charge on the income derivable from the bonds, which will then be exempt from any further liability in respect of these taxes, and the proceeds are to be paid in equal proportions into the Social Security Fund and the War Expenses Account. Several clauses in the Bill make alterations in the assessment of income tax payable by various classes of companies. One clause is designed to ensure that double taxation of goldmining companies is avoided. Another clause prevents companies from transferring share capital to debenture capital with the object of avoiding taxation. The net is also tightened on proprietary companies. ANNUITY FOR WIDOWS. A clause relating to the Government Superannuation Fund gives the right to a superannuitant to accept a reduced retiring allowance to that an annuity may be paid to his widow or dependants after his death. Widows of. railwaymen are placed on the same basis as widows of other members of the public service in respect of superannuation.

Any member of the public service who stands for or is elected to Parliament may postpone his superannuation rights accordingly, but is given the right to resume payments to the superannuation fund later. It is provided that Mr Coates (Opposition, Kaipara) is not to be disqualified from retaining his seat in Parliament because of a payment to him of public money for the purchase of a sound camera and equipment for the Government film studios.

A clause dealing with sales of petrol provides that any purchaser - whose quantities have been cut down through restrictions to an amount below that necessary to qualify for the trade discount must be allowed the reduced price on the smaller quantity. The clause is given retrospective effect. The Bill was read a first time.

An assurance that though the Bill did net contain provision to repeal a clause embodied in an earlier Finance Bill taxing gifts to charitable institutions, the necessary provision Would be made, was given by Jhe Minister of Finance, Mr Nash, in reply to a question by Mr Cobbe (Opposition, Manawatu). Mr Nash said he would see that the necessary clause was embodied in the measure.